How to read it
The curve
For each possible settlement level, the total that every call and put buyer in the expiry would collect, from open interest in units on the chain date. The lowest point is max pain. Prices are not used, only open interest.
The test
Max pain is a calculation, and a forecast has to beat a plain one. The plain forecast here is the previous close: the index stays where it closed on the chain date. Each bar is how many points nearer to the settlement max pain was, so above zero means max pain was nearer.
The count
The line above the chart says how often a fair coin would do as well. A handful of expiries is a small sample, so the honest reading today is "not shown", not "works" or "fails". The full test, with a rule written down before the data is pulled, is in the max pain module; the question page gives the short answer.
What it leaves out
Settlement is the index close on expiry day, which is the rule for every expiry in the file (the last is 28 Jul 2026). SEBI's circular of 15 Oct 2026 changes the method from 7 Dec 2026, so later expiries need a fresh test. Expiries whose close is not in the file cannot be scored. Pinning of prices near option strikes is studied in academic work on US stocks; that is a narrower claim than max pain predicting the close.
Go to the source
- SEBI, master circular on exchange traded derivatives: the index settlement price is the index close on expiry day
- SEBI, circular of 15 Oct 2026 on the closing auction session and the settlement method for derivatives, from 7 Dec 2026
- NSE, equity derivatives contract specifications
- Ni, Pearson and Poteshman (2005), Stock price clustering on option expiration dates, Journal of Financial Economics paper